New Fund Preserves Community Businesses By Helping Workers Take Charge
Small businesses often help define a community. When one closes, the neighborhood can take an economic hit. A new initiative announced this week aims to solve this dilemma by training workers to take over the operation.
From a hospital laundry service to a produce-growing operation, Cleveland-based Evergreen Cooperatives has launched a series of employee-run businesses over the past decade. Their new Fund for Employee Ownership looks to capitalize on that success by acquiring established small companies around Northeast Ohio and keeping them going when owners decide to retire.
Evergreen's Brett Jones says they are targeting service industry firms with 12 to 25 workers.
“Owners are looking to transition and the kids don't want it,” said Jones. “And they don't have a bunch of buyers knocking down their door because they aren't of significant size.”
Jones said the people who do come knocking, often don’t have the community’s best interests at heart. The new project aims to prevent outsiders from coming in just to make a quick buck.
“We're trying to guard against companies being swallowed-up and closed by a company outside of Cleveland that doesn't necessarily value Cleveland as a place, Cleveland as a community,” he said. “They're just merging, acquiring and moving companies and eliminating jobs.”
Jones said Evergreen will use an "acquire, convert and support" strategy to buy a business and train employees to run it themselves. The effort is being underwritten by what Evergreen calls “a number of mission-driven investors,” including the Atlanta-based Kendeda Fund. Jones said they plan to make their first acquisition next year.